Greece election winner Tsipras declares austerity era over for debt-laden country

Alexis Tsipras, opposition leader and head of the radical leftist Syriza party, greeting supporters after the initial election results for the Greece general elections in Athens on Jan 25 2015. -- PHOTO: EPA 
Alexis Tsipras, opposition leader and head of the radical leftist Syriza party, greeting supporters after the initial election results for the Greece general elections in Athens on Jan 25 2015. -- PHOTO: EPA 

ATHENS (Bloomberg) - Syriza leader Alexis Tsipras said that Greece's era of bowing to international creditors is over, as he celebrated his party's victory in Greek elections dominated by a public backlash against years of budget cuts.

Tsipras, addressing supporters in central Athens on Sunday night after Prime Minister Antonis Samaras conceded defeat, said that Greece is turning a page and putting austerity behind it. The Syriza government's priority "will be for Greece and its people to regain their lost dignity," he said.

"There will neither be a catastrophic collapse nor will continued kowtowing be accepted," said Tsipras, 40. "We are fully aware that the Greek people hasn't given us carte blanche but a mandate for national revival."

While Syriza's victory was more decisive than polls had predicted, it remains unclear whether the party will be able to govern alone. Even with a razor-thin majority or in a fragile coalition, the result hands Tsipras a clear mandate to confront Greece's programme of austerity imposed in return for pledges of 240 billion euros in aid since May 2010. The challenge for him now is to strike a balance between keeping his election pledges including a writedown of Greek debt and avoiding what Samaras repeatedly warned was the risk of an accidental exit from the euro.

"The Greek people punished New Democracy for governing in the petty manner of the old regime's political parties," Aristides Hatzis, an associate professor of law and economics at the University of Athens, said by phone. "Most Greeks voting Syriza don't expect a spectacular change but a marginal one. A marginal one would be significant for them."

Tsipras's Coalition of the Radical Left, known by its Greek acronym, took 36 per cent compared with 28.1 percent for Samaras's New Democracy, according to official projections. The far-right Golden Dawn placed third with 6.3 per cent, followed by To Potami, a potential Syriza coalition partner, with 5.9 per cent.

Syriza's victory, based on Interior Ministry projections after two-thirds of the ballots were counted, sends a signal to parties challenging economic and political conventions across Europe from a country whose output has shrunk by about a quarter and where one in two young people is jobless.

Investors must now wait for Tsipras to spell out how he plans to negotiate Greece's future financing needs. An extension of the current euro-area-backed bailout program expires at the end of February, with Greece projected to run out of money by July at the latest.

European policy makers including German Finance Minister Wolfgang Schaeuble and his Dutch counterpart, Jeroen Dijsselbloem, warned Greece before the vote against diverting from its agreed bailout program.

Finance ministers from the 19 countries that share the euro are due to discuss Greece and its bailout from the so-called troika of euro region governments, the ECB and the International Monetary Fund when they meet in Brussels on Monday.